MR(L Value of the Marginal Product Value of the Marginal Product边际产品价值WMP is the additional revenue a firm earns by employing one additional unit of an input ceteris paribus VMPL=(MPDX(PO) the marginal product of the input(MPD) multiplied by the market price of the output VMP is measured in dollars and diminishes as the number of workers rises because the market price of the good (Po) is constant 16
16 MR(L): Value of the Marginal Product Value of the Marginal Product(边际产品价值) (VMPL) is the additional revenue a firm earns by employing one additional unit of an input, ceteris paribus. VMPL = (MPL) x (P0 ) the marginal product of the input (MPL) multiplied by the market price of the output: VMPL is measured in dollars and diminishes as the number of workers rises because the market price of the good (P0) is constant
Marginal Product(MPD of Labor Faced with a capacity constraint in the short -run a firm that decides to increase output will eventually encounter diminishing returns Marginal product of labor MPvis the additional output produced by one additional unit of labor
17 Marginal Product (MP L) of Labor Faced with a capacity constraint in the short-run, a firm that decides to increase output will eventually encounter diminishing returns. Marginal product of labor (MPL) is the additional output produced by one additional unit of labor
Marginal Product(MPD of Labor Marginal Product(MPD) of Labor △O △L The change in output resulting from the addition of one more worker The change in total output accounted for by hiring the worker, holding all other factors of production constant MPL eventually declines because of the law of diminishing returns 18
18 Marginal Product (MP L) of Labor Marginal Product (MP L) of Labor The change in output resulting from the addition of one more worker The change in total output accounted for by hiring the worker, holding all other factors of production constant MP L eventually declines because of the law of diminishing returns L Q MPL ∆ ∆ =
Review: The Diminishing Marginal Product of Labour as the number of workers increases the marginal product of labour declines as more and more workers are hired each additional worker contributes less to the production. a The production function gets flatter as the number of workers rises
19 Review: The Diminishing Marginal Product of Labour As the number of workers increases, the marginal product of labour declines. As more and more workers are hired, each additional worker contributes less to the production. The production function gets flatter as the number of workers rises
Value of the marginal product MPL VMPL Value of Marginal Product curve
20 Value of the Marginal Product Value of Marginal Product Curve MP L,VMP L L MP L